ETF

Earnings Beats Fuel Optimism Among ETFs

Posted by MoneyController on 06.02.2021

At the end of Tuesday’s session, the US market and ETFs were starting to lose confidence in their gains as indices showed record highs. But investor sentiment remains high. Let’s take a closer look at the situation.

Invesco QQQ Trust (NASDAQ: QQQ) gained 0.2%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) remained stable, and iShares Core S&P 500 ETF (NYSEArca: IVV) decreased by 0.1%. 3M Co stated it had benefited from lower costs and higher demand for disposable masks, hand sanitizers, and safety glasses due to a new rise in COVID-19 infections. As of this moment, from the 84 companies that posted quarterly earnings Tuesday morning, 86.9% have surpassed analyst expectations

Nevertheless, this was not the case for all companies. American Express posted a 15% drop in quarterly profit due to lockdowns and business restrictions. Other important tech stocks, such as Microsoft and Texas Instruments will be publishing results after markets close. Moreover, Apple, Tesla and Facebook will publish their results on Wednesday. Most investors expect earnings beats that continue to surpass all analysts’ expectations while markets continue to improve. 

So for now, the market outlook is generally positive, even if improvement remains modest. With more vaccines showing up and their distribution becoming more widespread, market observers are optimistic that there will be more robust growth in the second half of this year. Shoqat Bunglawal of Goldman Sachs Asset Management told the Wall Street Journal that investors were expecting pent up demand to drive growth.  

If we see an easing of lockdowns, these high hopes might become reality sooner rather than later.

 

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